Molecular studies were conducted to define the role of the calmodulin (CaM)-dependent protein phosphatase, calcineurin (CN), in lymphokine gene activation and its sensitivity to the immunosuppressants, Cyclosporin A and FK-506. Using deletion mutants expressed in bacteria, a minimal domain of approximately 40 residues on the catalytic (A) subunit was shown to be necessary and sufficient for binding the regulatory (B) subunit. Expression of these mutants in human T cells showed that the dimeric A:B complex is needed to activate the interleukin (IL-2 promoter and to confer immunosuppressant resistance. Remarkably, transfection of N. crassa A subunit produces the same effects seen with mammalian CN-A, i.e., activation of multiple transcriptional elements (NF-AT, NF-KB, OAP) and formation of drug-dependent complexes with endogenous mammalian immunophilins. Thus, the fungal and mammalian enzymes have conserved both a distinctive catalytic specificity and immunophilin recognition; this may imply a biological need for regulation by immunophilins, perhaps via naturally occurring ligands. The pleiotropic effect of CN on trans-acting factors affecting IL-2 induction suggests that their activation is indirect, probably occurring at a site upstream of these components. In situ hybridization and immunolocalization studies in mouse brain showed a restricted pattern of expression for the CaM-dependent phosphodiesterase (PDE) isoform, PDE1B1, consistent with an important role in neurons containing D1 dopaminergic receptors. In contrast to the PDE1A2 isoform, it appears the PDE1B1 does not co-localize with CaM-sensitive adenylate cyclase, suggesting that the two enzymes participate in different temporal patterns of cyclic AMP degradation in response to stimuli. A potential homolog of phosphatidyl-inositol specific phospholipase C enzymes described in bacteria and T. brucei. Using PCR-based methods, CAPP-36 CDNAS were obtained from bovine, murine and human sources, and expression studies indicate that MRNA for this isoform is enriched in the cerebellum. Future studies will examine the biological activity of this protein after its overexpression in mammalian cells.